Monthly Archives: October 2008

//October

“The end is nigh!”

When I was a teenager, working for my first summer holiday job in central London, there was an old man that used to walk up and down Oxford Street with a big placard with the words “The end is Nigh”. At 16 I laughed his prediction away, wondering what the scam was, what motivated him to make such a fool of himself.

However, 35 years later, with all the chaos that has hit the stock and financial markets, it is not surprising that among the thousands of articles one can read on the subject, there are many doom and gloom stories that sound very plausible: ‘Melt down’, ‘worse than the Wall Street crash’ and so forth. As I mentioned in my previous blog on the subject, ‘Crisis what Crisis?’ everyone seems to have an opinion, which is, of course, normal. But I am getting very concerned that many business people are missing the point entirely.

It is not important whether you believe everything will blow over within a few months or if the world's economy will not recover from this for a very long time. The important thing is that responsible business leaders must start to make serious contingency plans. Surviving is about adapting your strategy based upon realistic possibilities and not on blindly following what you think the outcome will be. A business is not something that should be gambled based solely upon what the CEO believes will happen.

Every business leader (regardless if they are running a small family business or a giant multi-national) has responsibilities towards their shareholders, employees, suppliers and customers – and these need to be taken very seriously indeed. Therefore I suggest the following:

DO NOT panic those around you BUT do:
1. Stop talking about how bad or ok things are going to be
2. Set up an analysis project – give it a name.
3. Agree at least three possible economic (short to medium term) scenarios from OK to complete disaster
4. Draw up a risk analysis for your business for each scenario
5. Adapt your current strategy plan for each scenario
6. Set clear economic/performance KPI’s (Key Performance Indicators) for each scenario that will clearly indicate when you need to begin implementing your strategy for each scenario
7. Have your project endorsed by your board, expert shareholders or advisory board – whichever is most suitable for your situation

What I am suggesting here is about anticipation and managing the situation as best you can. For example: imagine that you are in the retail business and you believe that revenues will start dropping (if they have not done so already) - at which point are you going to take action? When will you actually begin to look at alternative ways of shifting inventory, or closing down outlets and laying off staff?

Business people like to complain about politicians not doing enough forward thinking and planning – but to be honest I have the feeling that many business leaders are simply following a ‘lets wait and see’ scenario. By making clear plans and looking at the impact on the cash flow and credit liquidity etc. now, we will be able to make much better decisions later on.

I have been in situations like this before, but not ever as bad as it ‘appears’ to be right now. I know that when things get really bad, people start panicking and take bad and irrational decisions. In the quiet before the storm, we need to separate emotion from action and make plans for both our businesses and our families. And, if the storm missus us completely, then at least we can feel comfortable knowing that we had a contingency plan in place, had it been necessary.

Please do not misunderstand me. I am not suggesting going into minute detail and pulling your staff off their daily tasks to panic about things they have no control over. All I am saying is: if, for example, your sales team are currently putting all their energy in a direction that you think is not likely to be effective in three months time, then maybe it is better to divert them into a more profitable direction sooner rather than later?

If your radar is telling you there is likely to be an iceberg ahead, then you need to begin now to decide how best you business can steer around it, once it appears. For some it is already getting rather too late.

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Working one level lower than you should be?

I was talking with a colleague this week that was trying to comfort himself for not getting a position of interim General Manager because (according to the selectors) the position would have stretched him too much.

Apparently there is a much applied theory that it is best to recruit interim managers one level lower than their highest career position ever. The idea being that the client does not want to take any risks. If this is true then there is little hope for career growth the moment you give up employee status! Logically this makes no sense to me on any grounds (even the risk aversion argument does not really apply). Some points:

1. It is true that many employees, at one stage in their career are promoted to one level higher than they should be. Thus I guess when they are booted out (given ‘early retirement’) that they can/should only be offered assignments one rung lower as a freelancer?
2. An interim Manager who does well on one assignment and is given more responsibility – eg starts as COO and gets promoted to CEO during an assignment, would then only be able to be a COO again in his or her next assignment?
3. As we get older we will always be promoted downwards until we became cleaners!

Point 3 is not so unusual – perhaps not a cleaner, but I know a senior executive of a big multi-national who worked for many years in the city of London and yet chucked it all in to be a ‘messenger boy’ at the age of 55. He spent his days (rain or shine) walking the streets delivering important documents and cheques by hand to clients and banks. etc. When asked why? He explained that he had no stress, enjoyed the bustle and beauty of the city, and kept fit into the bargain. I know a previous international banker that drives a delivery van to wherever it is needed. Perhaps soon there will be many ex bankers asking us if we want a side dish with our big Mac’s – but I imagine that we will not see this for a few months yet. Trickle down takes a while…

So the question this week is – at what level are you? The trouble for me is, I like being a COO, sometimes even the CEO – but I really love being a program manager, or even a change manager and even an everyday project manager. The only important point for me is to have a real challenge. One that is tough and needs all my skills ingenuity and management to drive a team to deliver against all odds. When the gauntlet of complex problem solving is laid before me – I simply can not resist it.

So my advice is, especially if you are between assignments or jobs. Think about the best job you ever had and be honest with yourself by asking (assuming you can survive on the lower fee) just how far would you be prepared to drop to find your optimal level? It is worth considering – especially before someone considers it for you!

Have a good week – stay positive and remember: Focus on your strengths and not your weaknesses (unless you can fix them in a relatively short timeframe).

H.

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” And the winner is …. “

The message this week is not to underestimate your personnel – how well do you know their capabilities, I guess not half as much as you might think?

On Wednesday the 8th. the final of the CEO’s dilemma (the competition that has been running in my book for the last thirteen months) was staged in a well known theatre in downtown Brussels. More than 200 people turned up on the night to witness the event.

"And the winner" was (much to his surprise) Chris Peeters. Chris was an outsider from the start, he had no interim management experience, he had never tackled a company restructuring, or managed a significant change project for a company in trouble. Yet his arguments were clear and were well thought through. Although the interviewing board of directors found holes in his reasoning, his coolness and clarity of thought on the night, plus his pleasant disposition – made him their unanimous choice.

But had you looked at Chris’ CV beforehand and compared it with those of many of the other contestants - you could be forgiven for not giving him a chance in hell. This is how, and why, so many companies go wrong. They simply do not know the true value of the personnel they have working right under their noses. You can not judge someone by only looking at their past, as seen by them and portrayed on a piece of paper called a CV. You need to give them opportunities to express what they are capable of and to at least share, in a non confrontational way, their ambitions. What’s more many people do not have concrete ambitions and need to be inspired to awaken to anywhere near their full potential.

Back to the competition: The CEO’s dilemma, the final event, the problem posed and indeed all the answers from the finalists (and a few other entrants) are all published on the Making a Difference website The Competition.

If you submitted an answer but were not selected for the final – thank you for your support, there will be more competitions coming in the future, so please enter again next time. Who knows you might be up against Chris!

A last note: Congratulations to all the finalists and thanks again to the excellent board of directors: Jules Noten, Cor Loots, Tamara Gielen, Raf Moons and Chris Van der Schueren. And also to the sponsors: Vlerick Management School, Fibiz Partners, Blackberry, LannooCampus , Magnus Wine and of course to my partners from The Bayard Partnership. Thank you everyone!

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Is it possible to have a large company with a motivated workforce?

This question was posed to me during a recent reunion of a few employees of a small Belgian software company that was sold off to a large multi-national a few years back. We were debating why it was that our little company had been so successful and how come we were all so motivated to work for it?

My explanation was that we were ‘David versus Goliath’. I proposed that what motivated us was the excitement of us having a few brilliant engineers working together, competing against a massive US team employed by a very large American Multi-national. Even though the odds were stacked against us, we managed to produce a better product, far quicker and obviously far more efficiently every single time. Despite all the struggles we had, we shared a common vision and each of us knew the part we had to play in order to achieve it.

Like many reunions, all of the ex-employees looked back at their 'Eonic days' as being special and the company as being the best they had ever worked for. But then the notion was raised that it is impossible to have a truly motivated workforce in a large company. I immediately disagreed and said it was possible, just as long as the company had a very clear mission and that the senior management teams found ways of engaging all their staff into the common goal, with everyone apreciating the responsibility they each have for their own role and their own part of the complex puzzle.

The question is: Does such a company exist? And where is it, what is its name?

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